HDFC Bank Shares Surge 3%, External Counsel To Review Chakraborty's Resignation Letter

The shares of HDFC Bank gained as much as 3% to hit an intra-day high of Rs 755 apiece on Tuesday, March 24, reversing its four-day declining streak.

This occurred after the Mumbai-headquartered lender decided upon appointing external law firms to review former Part-time Chairman and Independent Director at HDFC Bank, Atanu Chakraborty's, resignation.

According to the private bank's exchange filing dated March 24, the lender noted the “appointment of external law firms (domestic and international), to conduct review regarding Mr. Chakraborty’s resignation letter.”

"The said law firms have been advised to provide their report on the same within a reasonable period of time,"  it said.

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When Chakraborty resigned he cited that core reason being certain developments and practices in the bank over last two years were in misalignment to his personal values and ethics.

Meanwhile, Interim Part-time Chairman, HDFC Bank, Keki Mistry noted that no "specific operational or other issues" have been highlighted.

"I wish to assure all stakeholders that there are no material matters at this point of time," he said.

"The board's oversight mechanism remains fully operational and our collective commitment to protecting the interest of the institution, depositors, shareholders, and all stakeholders is completely and totally unwavering," he added.

On the other hand, the lender also clarified that the recent termination of three employees followed an internal investigation linked to a regulatory notice from Dubai, while. further noting that this incident had no material impact on the private bank.

The bank also noted that its Governance, Nomination and Remuneration Committee (GNRC) had initiated an internal investigation under its conduct regulations. The investigating officer submitted findings to the disciplinary committee, which, after deliberation, recommended accountability measures to the GNRC.

On March 9, the GNRC approved the dismissal of the three employees, while noting that those employees have the choice to appeal the decision before the Appellate Authority, which is its board of directors.